State Appeals Court Rejects RGB “Poor Tax”

A state appeals court has upheld striking down the minimum increases the city Rent Guidelines Board imposed on long-term tenants in 2008 and 2009.

On June 22, the Appellate Division, First Department unanimously affirmed Judge Emily Jane Goodman’s January ruling that the increases were illegal. The RGB had set minimum increases of up to $85 a month for tenants who had occupied their apartments for at least six years and paid less than $1,000 a month.

In a brief ruling, the court stated that the state rent-stabilization law gives the City Council power to set maximum rent increases in New York City, and the Council delegates the details of that to the RGB. However, the court held that “the Rent Guidelines Board is necessarily subordinate to the City Council, which is vested by the State with the exclusive power to promulgate local rent regulations.” The Council has the power to allow different rent treatment for different classifications of housing accommodations, it added, but it has not done so.

The court said that the RGB thus may not “step into the breach, without express statutory authority or delegation by the City Council. By imposing minimum dollar rent adjustments based on tenant longevity and rental amount, the Rent Guidelines Board not only went beyond its authority to set maximum rent rates, but also impermissibly created a new class of rental accommodation, a policy determination exclusively reserved to the City Council.”

The court also cited the July 2008 decision in a Long Island case, NYC Tenants & Neighbors v Nassau Co. RGB, in which the Appellate Division, 2d Department, ruled that a similar differentiation between classes of tenants exceeded the Nassau rent board’s authority.

The suit, Casado v. Markus, was brought by the Legal Aid Society and South Brooklyn Legal Services against the RGB and former chair Marvin Markus, on behalf of the class of tenants affected by the minimum increases. They included Mercedes Casado, who faced an increase of 11.5 percent on her $739.31 rent.

The Bloomberg administration and two landlord groups, the Rent Stabilization Association and the Community Housing Improvement Program, backed the increases. The City Council filed an amicus brief opposing them.